Portola Valley in the middle of a property drought

There was a time, and it wasn’t too long ago, that home-shopping in Portola Valley could take weeks as you and your Realtor checked out each of the properties that met your buying criteria. Now you can do it all in a day or two. And probably throw in a leisurely lunch.

Currently, there are four Portola Valley homes on the Multiple Listing service, by far the lowest count we’ve seen for more than two years. Inventory for single-family homes has been on a downward spiral for months leading up to this barren February, and it would not come as a surprise if the number of available homes continued to shrink in the ensuing months.

When February is finished, we’ll probably see several more homes added to the current four that will have been for sale throughout the month, but don’t expect too much of a difference if this season of decrease continues.

In the last six months – August 2014 to January 2015 – a monthly average of just 15.3 homes were on the market. But that figure is deceptive. In January there were eight homes listed. The drop began in earnest in October, when there were 18 listings, down from 23 in September. In November, the total was 14. In December it narrowed to 11.

Compare this six-month period to the same period a year ago, when there was a monthly average of 23.5 homes on the MLS in Portola Valley. And compare it to the first six months of 2013, when the monthly average was 34.

And now there are four.

Curiously low for-sale prices

What’s just as interesting as the massive drop in inventory is the listing-price trend for homes over the last two years. Typically in Silicon Valley, when fewer homes are available, the prices go up – a simple supply-and-demand metric. Not so in Portola Valley. Initial listing prices have actually gone down across the months from January 2013 to January 2015.

The median for-sale price last month (January) was $2,545 million, the lowest median price in the last 24 months. The previous month – December 2014 – saw a median price of $3,495 million. The figure for January 2013 was $3,375 million. The peak median price over the last two years was $4,272,500 in January 2014 – the only month in this period where the dollar figure rose above $4 million.

Although median prices are not yet adjusted for all the activity that will happen this month, the four properties we currently have on the market show a median list price of $4,349 million.

Will February begin an upward pricing trend? Will inventories continue to shrink with the possibility that soon there will be no homes available in Portola Valley? These are market movements we’ll be keeping a close eye on in the upcoming months.

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